What's At Stake In The Donations Wars


Last week Nathan Tinkler's "Aston Coal 2" mine was before the Land & Environment Court in Sydney after two of its directors failed to declare political donations to the Department of Planning.

Former Nationals Leader Mark Vaile (now the independent chairman of Tinkler's Aston Coal), promised the two directors, Todd Hanningan and Thomas Todd, up to $4 million worth of shares if the mine received approval before mid-2013. Hanningan and Todd subsequently donated the maximum $5,000 to the National Party just days before the NSW state election. The company failed to declare these donations as required on its planning submission for the Maules Creek coal mine.

Tinkler, the company's major shareholder, also donated $5,000 to the NSW National Party and $45,000 to the federal branch. He also failed to lodge his donations with the planning proposal. Tinkler escaped prosecution through a loophole in the law because a subsidiary of his company, "Aston Coal 2", lodged the actual application, rather than the parent company "Aston Resources".

Unfortunately this mine has now been approved and will destroy the last remnant forest on the Liverpool Plains and endanger local farms and water resources.

It isn't just Aston Resources that was donating from the mining sector. Since 1999, mining companies have donated over $1 million to state branches of political parties. NSW Labor received $451,970. The NSW Liberals received $386,247. The NSW Nationals received $161,018.

At a federal level the mining sector has been even more generous. Combined donations have amounted to $4,450,938 since 1999, with Labor receiving $1,196,893, the Liberals getting $2,982,440, and the Nationals taking $271,650.

Gas company Santos, who are seeking approval for a giant coal seam gas field in North West NSW has donated $666,856 to political parties since 1999. Fellow coal seam gas company AGL donated $223,375.

Also this week the ICAC revealed that Eddie Obeid got angry with then Ports Minister Carl Scully because a $50,000 donation to the Labor Party in 1996 by Obeid's mate Tony Imad was not rewarded with a long-term lease of Circular Quay cafes as had been expected.

By the 2011 state election, the citizens of NSW were absolutely sick of the decisions for donations culture that had thrived under Labor. The work of then Greens state MP Lee Rhiannon and the director of the Democracy4Sale project Dr Norman Thompson were critical in publicising just who was donating to whom, and highlighting the effects of donations on governance in NSW.

Considerable reform of political donations in NSW resulted, starting in the dying days of the former Labor government. The O'Farrell government, with the support of the Greens, passed laws in 2012.

The Greens' long standing policy has been to remove the large amounts of money involved in modern democracy so that good governance is not compromised and so elections are based on policies and ideas, rather than a fundraising and advertising battle.

Unions NSW have challenged the laws in the High Court, saying that by limiting donations to individuals, the O'Farrell government has engaged in "a blatant and partisan political manoeuvre" against unions. In its submission to the High Court, the NSW Government notes that: 

"…any political donation made by a corporation will likely reflect the view of the board or management of that corporation as to where the corporation's interests lie. The act of making a political donation is not likely to be undertaken as an act of pure altruism."

Limiting political donations to individuals only has been a critical plank of the Greens' donations policy, and the laws passed by the NSW Parliament in 2012 achieved this goal. Other critical planks of the Greens' donations policy such as capping the amount individuals can donate, timely public declarations of donations, caps on electoral spending and public funding of elections and political parties have also been implemented to varying degrees.

The ban on organisational donations not only cuts off the rivers of gold that used to fill the ALP's coffers from developers, hotels, miners and other companies, but also stops the ability for affiliated unions to donate money in the form of affiliation fees. Unions NSW, in their high court challenge, also claim that restrictions on how third party campaigns can be funded are an unfair burden.

Some commentators have portrayed the ban on organisational donations as a cynical attack on unions and the structure of the Labor Party by NSW Premier Barry O'Farrell. Others take a swipe at the Greens for supporting the legislation that implemented the party's policy to restrict donations to individuals only.

What these critics fail to note is that unions can still affiliate with the ALP. Shooting clubs can still affiliate with the Shooters Party too. They just can't donate money in conjunction with the affiliation. Individual union members can still donate to any political party they wish, but will not have a portion of their union fees automatically directed to the ALP by the union's executive.

Unions (and other third parties) can still run political campaigns on issues, but will be subject to spending caps — as are political parties. Unions, or environment groups, or shooting clubs can still coordinate their campaigning, albeit with a different financial structure to abide by the electoral funding law.

It is true that the ban on affiliation fees may decrease the power of union officials within the ALP. Holding the purse strings on significant affiliation fees provided a justification for giving union leaders a large amount of power on party committees, in the factions, and over preselections. Whether these union officials deserve to keep that power in the absence of affiliation fees is up to the ALP and its membership, and it will be interesting to watch.

I spend much of my time as an MP campaigning against coal seam gas and the expansion of coal mining in NSW, while AWU boss Paul Howes has publicly declared he is a "dig it up, chop it down, pave it over kind of guy". He wants to let coal seam gas rip across the farmland and water catchments of NSW. In Tasmania he wants to mine the precious Tarkine forest. I will not shed a tear if his power in is diminished within the ALP due to the ban on affiliation fees.

The retort will be that union donations are different to other corporate donations because unions represent the collective will of their members. Company donations could also be said to represent the collective will of the employees or shareholders. Both see collective funds being distributed by an executive and the law should apply evenly.

If we were to make an exemption for "member-based" organisations, then it is likely we would have political action committees or other types of organisations formed to get around restrictions on corporate donations and money politics will once again take a hold, albeit restructured.

This is the danger if Unions NSW wins in the High Court. Not only will affiliation fees be restored in NSW, but a precedent that essentially equates money with free speech will likely see previous reforms unravel and corporate donations from developers, tobacco, gambling and mining re-emerge to distort and undermine our democracy.

APPEA, the peak oil and gas body, had the fourth highest advertising spend during the 2013 federal election. The Lock the Gate Alliance, which fights coal seam gas and coal mining, is run on a shoestring by comparison, and is primarily driven by grassroots volunteers. Despite their million dollar ad campaigns APPEA, and their PR firm Crosby Textor, have spectacularly failed to convince people that coal seam gas is a good idea. This goes to show that politics is not always about large amounts of money to buy slick advertising.

If the High Court decides that money equates to free speech, then it will be a massive backward step. Mining and gas companies will once again have an opportunity to buy influence with the governments, oppositions and cross-benchers. If this eventuates, then Unions NSW will have done themselves, their members, working people and the broader public a disservice.

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